How Apple led an e-book price conspiracy—in the judge’s words

And why publishers accepted less money from Apple than from Amazon.

Earlier today, Apple lost a major case when District Judge Denise Cote ruled that the company led a conspiracy to raise e-book prices above those charged by Amazon. Cote's 160-page ruling, released this morning, offered some intricate detail on just how that conspiracy worked.

Cote described how Apple struck agreements with each of the five publisher defendants—who settled the case before trial—in order to push e-book rates higher than Amazon's. The negotiations happened in the seven weeks leading up to the January 27, 2010 announcement of the iPad.

Publishers told Apple they were unhappy with Amazon's standard price of $9.99. Although they received the full wholesale value of each book sold by Amazon, publishers didn't want $9.99 to catch on as the new default price for e-books, especially since this was so much lower than hardcovers. One strategy they used to keep revenues up was to delay the release of e-book versions of new books, but Apple told publishers it opposed this tactic in its then-forthcoming e-books store. HarperCollins wanted to flat-out charge as much as $18 or $20 for e-books, but Apple Senior VP Eddy Cue also made it clear that this was unrealistic. Apple was more amenable, however, when HarperCollins suggested using an "agency model" instead of the wholesale model used by Amazon.

With a wholesale model, Apple would purchase e-books and resell them at a price of its choosing, whereas with an agency model "a publisher sets the retail price and the retailer sells the e-book as its agent." Apple would become the agent selling the books, taking a 30 percent commission on each sale, just as it does with its App Store.

But Apple did not want to open an e-book store at all unless it was profitable, Cote wrote, and in order to make it work, the company had to deal with Amazon. Apple had even considered proposing a partnership with Amazon, "with iTunes acting as 'an e-book reseller exclusive to Amazon and Amazon becom[ing] an audio/video iTunes reseller exclusive to Apple,'" Cote wrote.

"Apple realized, however, that in handing over pricing decisions to the Publishers, it needed to restrain their desire to raise e-book prices sky high," Cote wrote. "It decided to require retail prices to be restrained by pricing tiers with caps. While Apple was willing to raise e-book prices by as much as 50 percent over Amazon’s $9.99, it did not want to be embarrassed by what it considered unrealistically high prices."

Most Favored Nations

The agency model (along with publisher-set but capped prices of $12.99 to $14.99) made it profitable enough for Apple to open its own e-book store—so long as Amazon's prices went up, too. Apple thus devised a Most Favored Nation (MFN) clause in its contracts with publishers which "guaranteed that the e-books in Apple’s e-bookstore would be sold for the lowest retail price available in the marketplace," Cote wrote. For the publishers to charge up to $14.99 for e-books on Apple's iBooks store, they had to raise prices on Amazon's Kindle store as well by collectively forcing Amazon to accept the agency model.

The MFN approach "eliminated any risk that Apple would ever have to compete on price when selling e-books, while as a practical matter forcing the Publishers to adopt the agency model across the board," the judge wrote.

Amazon, which had nearly 90 percent of the e-book market, resisted the publishers' demands to move to abandon the wholesale model. (Amazon apparently wanted to subsidize content prices, in part, so that it could move e-reader hardware and spur the adoption of e-books by mainstream users.) It retaliated against the demand by removing the "buy" button on Amazon's site for Macmillan books after Macmillan proposed a new agency model deal. Amazon also offered authors a “new 70 percent royalty option” for e-books with a list price “between $2.99 and $9.99," eliminating the middleman and giving authors higher profits.

Amazon could not stand firm for long, however, because the publishers all insisted on new terms more favorable to them. "Attempting to leverage its Apple negotiations to get a better deal with Amazon, HarperCollins included a proposed retail price for the majority of titles at either $12.99 or $14.99, but a commission of just 5 percent for Amazon," the judge's decision states. "HarperCollins then leveled its threat to Amazon. If Amazon declined its offer, HarperCollins would delay for six months the release of any e-book sold on a wholesale basis." Others publishers made similar proposals, but all insisted on agency.

Amazon Kindle Content VP Russell Grandinetti testified at trial that “[i]f it had been only Macmillan demanding agency, we would not have negotiated an agency contract with them. But having heard the same demand for agency terms coming from all the publishers in such close proximity... we really had no choice but to negotiate the best agency contracts we could with these five publishers.”

In Cote's view, this was nothing less than a concerted effort to raise prices—a conspiracy. She summarized Apple's responsibility for the whole situation this way:

A chief stumbling block to raising e-book prices was the Publishers’ fear that Amazon would retaliate against any Publisher who pressured it to raise prices. Each of them could also expect to lose substantial sales if they unilaterally raised the prices of their own e-books and none of their competitors followed suit. This is where Apple’s participation in the conspiracy proved essential. It assured each Publisher Defendant that it would only move forward if a critical mass of the major publishing houses agreed to its agency terms. It promised each Publisher Defendant that it was getting identical terms in its Agreement in every material way. It kept each Publisher Defendant apprised of how many others had agreed to execute Apple’s Agreements. As Cue acknowledged at trial, “I just wanted to assure them that they weren’t going to be alone, so that I would take the fear awa[y] of the Amazon retribution that they were all afraid of.” As a result, the Publisher Defendants understood that each of them shared the same set of risks and rewards.

Why publishers accepted less money from Apple

Somewhat counterintuitively, the agency agreements actually lowered the amount of money each publisher received per book. While wholesale agreements gave publishers about 50 percent of the hardcover list price on e-book sales, Apple's agency deals provided 70 percent of the final e-book retail price. This ended up being a significant cut in real dollars.

Cote explains:

[A] Publisher might receive $13 on a wholesale basis for an e-book sold by Amazon for $9.99, but (because of the MFN) only $7 from Apple so long as Amazon was still selling that e-book for $9.99. Even if Apple and Amazon were on the same agency arrangement with a Publisher, and that Publisher were able to move the retail price of the e-book to the top of the Apple price tier and sell it for $12.99, the Publisher would still receive less revenue under the agency model: $9.10 instead of the $13.00 in revenue under the wholesale model.

This chart from Cote's ruling illustrates the pricing and payment breakdowns:

Agreeing to agency models still suited the publishers' long-term interests because they wanted to "shift their industry to higher e-book prices to protect the prices of their physical books and the brick and mortar stores that sold those physical books," Cote wrote, adding that "[t]o change the price of e-books across the industry ... the Publishers would have to raise Amazon’s prices."

Random House, the largest publisher, resisted Apple's call to adopt the agency model in 2010. But the company capitulated a year later in order to get its books on the iPad.

"Apple decided to pressure Random House to join the iBookstore," Cote wrote. "As Cue wrote to Apple CEO Tim Cook, 'When we get Random House, it will be over for everyone.' Apple had its opportunity in the Fall of 2010, when Random House submitted some e-book apps to Apple’s App Store. Cue advised Random House that Apple was only interested in doing 'an overall deal' with Random House. By December, they had begun negotiations, and Random House executed an agency agreement with Apple in mid-January 2011. In an e-mail to [Steve] Jobs, Cue attributed Random House’s capitulation in part to 'the fact that I prevented an app from Random House from going live in the app store this week.'"

The switch to an agency model also impacted Google, which had plans for an Android e-book store of its own.

"Before January 2010, Google understood from its discussions with the Publisher Defendants that the parties would use the wholesale model to sell digital books. But, in January 2010, each of the Publisher Defendants did an about-face and suddenly advised Google that they were switching to an agency model and would no longer be offering books under wholesale terms," Cote wrote. "Google, like Amazon, would have preferred to use the wholesale model and set the retail prices for its e-books, but the Publisher Defendants refused to allow it that option."

Steve Jobs’ role in the conspiracy

When Steve Jobs announced the iPad in January 2010, he demonstrated purchasing a book from the iBookstore. Cote writes:

When asked by a reporter later that day why people would pay $14.99 in the iBookstore to purchase an e-book that was selling at Amazon for $9.99, Jobs told a reporter, “Well, that won’t be the case.” When the reporter sought to clarify, “You mean you won’t be $14.99 or they won’t be $9.99?” Jobs paused, and with a knowing nod responded, “The price will be the same” and explained that “Publishers are actually withholding their books from Amazon because they are not happy.”

With that statement, Jobs acknowledged his understanding that the Publisher Defendants would now wrest control of pricing from Amazon and raise e-book prices, and that Apple would not have to face any competition from Amazon on price.

The import of Jobs’s statement was obvious. On January 29, the General Counsel of S&S [Simon & Schuster] wrote to [Simon & Schuster CEO Carolyn] Reidy that she “cannot believe that Jobs made the statement” and considered it “[i]ncredibly stupid.”

Justice officials prosecuting the e-book case pointed to e-mails from Jobs demonstrating his role in pressuring the publishers. "Compelling evidence of Apple’s participation in the conspiracy came from the words uttered by Steve Jobs, Apple’s founder, CEO, and visionary," Cote wrote, then brought out the puns. "Apple has struggled mightily to reinterpret Jobs’s statements in a way that will eliminate their bite. Its efforts have proven fruitless."

Cote references e-mails Jobs sent to James Murdoch of News Corp., owner of HarperCollins. While Apple's agency model would pay publishers less per book than HarperCollins received from Amazon, Jobs told Murdoch that the anticipated iPad sales would make the model more than worth it. "We will sell more of our new devices than all of the Kindles ever sold during the first few weeks they are on sale," Jobs wrote. "If you stick with just Amazon, B&N, Sony, etc., you will likely be sitting on the sidelines of the mainstream e-book revolution."

Jobs urged Murdoch to "throw in with apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99." The only other alternatives, Jobs wrote, were to "Keep going with Amazon at $9.99" or to "Hold back your books from Amazon," which would lead to piracy.

Enlarge/ A graph created by the US Department of Justice to show how e-book prices rose following the introduction of Apple's iBookstore.

Links in a chain

In its opening statement, Apple identified five "essential links" the plaintiffs had to establish to prove Apple led the conspiracy. These links, Cote wrote, were that the publishers signed Apple’s agency agreements with an MFN and price caps, that the MFN sharpened the publishers' incentives to demand agency agreements from Amazon, that the agency demands convinced Amazon of the futility of resistance, that Amazon agreed to agency deals in circumstances in which it would not have if not for the Apple MFN, and that publishers raised prices to the price caps as per the agreements with Apple.

"All of the 'links' that Apple identified in its opening statement were established at trial, and Apple did not argue otherwise in its summation," Cote wrote. "Apple similarly abandoned by summation its theory that Apple was unaware that the Publisher Defendants would use their new pricing authority to raise e-book prices; over the course of the trial, Apple’s witnesses admitted that they expected the Publisher Defendants to raise their e-book prices to Apple’s price caps."

DOJ Antitrust Division Chief Bill Baer applauded Cote's decision. “As the department’s litigation team established at trial, Apple executives hoped to ensure that its e-book business would be free from retail price competition, causing consumers throughout the country to pay higher prices for many e-books," Baer wrote. "The evidence showed that the prices of the conspiring publishers’ e-books increased by an average of 18 percent as a result of the collusive effort led by Apple. Companies cannot ignore the antitrust laws when they believe it is in their economic self-interest to do so. This decision by the court is a critical step in undoing the harm caused by Apple’s illegal actions."

As we noted in our earlier story, Apple already said it plans to appeal. "Apple did not conspire to fix e-book pricing," the company said. "When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon's monopolistic grip on the publishing industry. We've done nothing wrong."

Promoted Comments

The accusation is collusion. Five publishers, which are supposed to be in competition with each other, instead agreed to raise prices in unison so customers would have no choice but to pay the extra five bucks a book, no matter what store they went to or what publisher they decided to buy from. They behaved as a cartel, with Apple as the ringleader.

Several commenters have stated Amazon requires its sellers to offer products (on the Amazonwebsite) at their lowest price.

I'm not sure this is actually the case. One of my suppliers (own website as well as Amazonreseller) shows a significant markup if you buy the product through Amazon as opposed tobuying it off their own website. Specific example: 8.52 versus 10.65.

General Pricing Rule: By our General Pricing rule, you must always ensure that the item price and total price of an item you list on Amazon.com are at or below the item price and total price at which you offer and/or sell the item via any other online sales channel.

To everyone going on and on about Amazon doing "the same thing" by insisting that all items sold through them must match the lowest price the seller sets elsewhere: That's not even remotely the same thing. Apple's not in trouble for insisting that they be given the best price, that's perfectly legal. Apple's in trouble for working with publishers to change what that "best price" was.

In the hopes of cutting down on nonsense that then gets down-voted into oblivion, I'd like to repeat something I said in the earlier thread:

At this point, anybody accusing Amazon of dumping or operating their eBook division at a loss may as well be shouting out, "I am completely ignorant of the facts of the matter and am blindly repeating things I've heard!"

If you are considering posting one of the above complaints/accusations, please first take the time to go and educate yourself on the facts of the matter, and then make an informed post that does not use as its basis allegations that have been shown to be baseless.

Or, in the immortal words of Harlan Ellison:

Quote:

You are not entitled to your opinion, you are entitled to your informed opinion. If you are not informed on the subject, then your opinion counts for nothing.

Interesting how uber Apple blogger John Gruber snidely comments on the guilty verdict:

Quote:

Part of the evidence was this video shot by Kara Swisher of Steve Jobs speaking with Walt Mossberg in the hands-on press area after the introduction of the original iPad in 2010. Mossberg asks Jobs why someone would buy a book for $14.99 from the iBookstore when they could buy the same book from Amazon for $9.99.

" Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99, or they won’t be $9.99?

Jobs (smiling): The prices will be the same. "

Judge Cote found that damning. No wonder Apple executives so seldom speak on the record.

Interesting how uber Apple blogger John Gruber snidely comments on the guilty verdict:

Quote:

Part of the evidence was this video shot by Kara Swisher of Steve Jobs speaking with Walt Mossberg in the hands-on press area after the introduction of the original iPad in 2010. Mossberg asks Jobs why someone would buy a book for $14.99 from the iBookstore when they could buy the same book from Amazon for $9.99.

" Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99, or they won’t be $9.99?

Jobs (smiling): The prices will be the same. "

Judge Cote found that damning. No wonder Apple executives so seldom speak on the record.

So John, that's the reason, eh?

So... he's saying when they speak on the record it is tantamount to admitting to illegal business practices? Not much of defense in my opinion.

The accusation is collusion. Five publishers, which are supposed to be in competition with each other, instead agreed to raise prices in unison so customers would have no choice but to pay the extra five bucks a book, no matter what store they went to or what publisher they decided to buy from. They behaved as a cartel, with Apple as the ringleader.

Amazon had a monopoly and Amazon used its monopoly of e-books to set prices.

They set the price for their own outlet. Just as Barnes and Noble can set their own prices for books in their own stores. But anybody else was free to price e-books from the same publishers higher or lower. Amazon could take a loss if they had to (apparently they weren't), but they couldn't dictate prices for anybody else. They were not fixing prices. Apple negotiated and coordinated deals with the publishers that basically fixed prices. Nobody would be allowed to sell those e-books for less than what they cost on iTunes.

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Apple entered the market and it's competition upset the monopoly.

Except they weren't competing. That's what their price fixing meant: they didn't have to compete. Not on price, anyway.

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The point is that it's not appropriate for one party to control prices in a market...

Which is exactly what Apple was doing. Amazon may have dominated the market in terms of sales, but Apple wrested control with the publishers to literally control the prices in the market.

That it happened to result in prices going up is fairly unimportant. The point is that it's not appropriate for one party to control prices in a market regardless of which direction it's pushing them. If there are some more subtle legal details in this case that add up to price fixing none of my readings have made sense of them.

On the other hand everyone I see responding fixates on the fact that Apple happened to drive up prices of E-Books. That's simply not important and ironically, as the article points out, despite the higher prices the publishers actually made LESS money. The point is that Amazon's monopoly took away their control, they wanted it back, and competition from Apple gave them that.

As far as I can see Amazon did not have a monopoly, there were several others selling ebooks before they ever got into the market. Sony being one of the largest. But even if they did have a monopoly, they did nothing to interfere with other sellers. Apple on the other hand, conspired with the publishers to control Amazon's market. That's what they are getting nailed for. The fact that the prices went up proves harm to both the consumer and to Amazon. Like Amazon or not, they never tried to dictate Apple's business practices like Apple did to Amazon.

Interesting how uber Apple blogger John Gruber snidely comments on the guilty verdict:

Quote:

Part of the evidence was this video shot by Kara Swisher of Steve Jobs speaking with Walt Mossberg in the hands-on press area after the introduction of the original iPad in 2010. Mossberg asks Jobs why someone would buy a book for $14.99 from the iBookstore when they could buy the same book from Amazon for $9.99.

" Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99, or they won’t be $9.99?

Jobs (smiling): The prices will be the same. "

Judge Cote found that damning. No wonder Apple executives so seldom speak on the record.

So John, that's the reason, eh?

So for Jobs, his problem was not colluding to raise prices but being caught saying he was going to raise prices?

Interesting how uber Apple blogger John Gruber snidely comments on the guilty verdict:

Quote:

Part of the evidence was this video shot by Kara Swisher of Steve Jobs speaking with Walt Mossberg in the hands-on press area after the introduction of the original iPad in 2010. Mossberg asks Jobs why someone would buy a book for $14.99 from the iBookstore when they could buy the same book from Amazon for $9.99.

" Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99, or they won’t be $9.99?

Jobs (smiling): The prices will be the same. "

Judge Cote found that damning. No wonder Apple executives so seldom speak on the record.

So John, that's the reason, eh?

So for Jobs, his problem was not colluding to raise prices but being caught saying he was going to raise prices?

No, Jobs problem is that he met with the publishers as a group and orchestrated actions that locked Amazon into a controlled market. What he said only supports this fact. Its one thing to do, its another to tell people about it showing for thought as to consequences.

Amazon, which had nearly 90 percent of the e-book market, resisted the publishers' demands to move to abandon the wholesale model. (Amazon apparently wanted to subsidize content prices, in part, so that it could move e-reader hardware and spur the adoption of e-books by mainstream users.)

I'm not sure how many people realize exactly how important this really is. Prior to Amazon hopping into the game there were very few e-book stores, but they did exist. I had been buying e-books for 6-8 years prior to amazon's kindle from the palm book store. Most of the pre-kindle e-book focus had been leveraged towards the tech crowd's tastes. But Amazon's entry and lower pricing really brought it all together for the mainstream user.

I had been afraid this would turn out to be the drug dealers strategy of first try is free/low cost then raising the market place pricing after acceptance... looks like Apple just managed to both take care of that problem AND take the blame for it instead.

Interesting how uber Apple blogger John Gruber snidely comments on the guilty verdict

Gruber can be a little quick to defend Apple, but you're taking this out of context. He also said the ruling was a "cogent read." Cogent = convincing.

No, he changed his post and didn't mark that he'd done so.

I just went back into my rss reader, pulled up the read items, and here is his original post in full:

Quote:

Brian X. Chen and Julie Bosman, reporting for the NYT:

A federal judge on Wednesday found that Apple violated antitrust law in helping raise the retail price of e-books, saying the company “played a central role in facilitating and executing” a conspiracy with five big publishers.

“Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010,” the judge, Denise L. Cote of United States District Court in Manhattan, said in her ruling. She said a trial for damages would follow.

Part of the evidence was this video shot by Kara Swisher of Steve Jobs speaking with Walt Mossberg in the hands-on press area after the introduction of the original iPad in 2010. Mossberg asks Jobs why someone would buy a book for $14.99 from the iBookstore when they could buy the same book from Amazon for $9.99.

Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99, or they won’t be $9.99?

Jobs (smiling): The prices will be the same.

Judge Cote found that damning. No wonder Apple executives so seldom speak on the record.

I would love to hear more about how Amazon's play to increase author revenue while cutting out publishers is working out. I am fan of some brilliant self-published titles such as the Wool Series by Hugh Howey and would love to see more self-published books of that caliber rather than the Vampire Fetish drivel coming out of big publishers.

Could someone explain to me what might happen with the agency model? (I don't buy ebooks or follow any of that at all so I'm not sure if anything has changed since they all conspired to go with that) Since they already were caught and punished for their conspiracy in illegal price fixing, is it still price fixing if they just continue doing it even though they are no longer conspiring anymore? (in the direct sense anyways, they're not going to meetings as far as anyone knows) If it would still be considered illegal to go with the same model that was born from the initial conspiracy, how does the government enforce change?

Anyway, I finally understood the case and the subsequent ruling. I think Apple's fault was not considering the real consequences of their requests, in particular the MFN: they offered an alternative to a bunch of unhappy publishers (unhappy with Amazon), which were more than happy to get less for their ebooks in the short run with the possibility to get a tighter control of the ebook market on a global shift to the agency model.

This was a subtle forcing from Apple, the executives knew that the MFN clause would mean pressure on Amazon, I think it's pretty clear from those Jobs' and Cue's quotes: I agree with the ruling because I can see the guilt.

The lesson to be learnt is that even if a perspective is good (the agency model is better in any possible way, because publishers and content creators should compete, not middlemen), you cannot push your vision to the market with such strength that you need an act of collusion to succeed.

Interesting how uber Apple blogger John Gruber snidely comments on the guilty verdict

Gruber can be a little quick to defend Apple, but you're taking this out of context. He also said the ruling was a "cogent read." Cogent = convincing.

No, he changed his post and didn't mark that he'd done so.

I just went back into my rss reader, pulled up the read items, and here is his original post in full:

Quote:

Brian X. Chen and Julie Bosman, reporting for the NYT:

A federal judge on Wednesday found that Apple violated antitrust law in helping raise the retail price of e-books, saying the company “played a central role in facilitating and executing” a conspiracy with five big publishers.

“Without Apple’s orchestration of this conspiracy, it would not have succeeded as it did in the spring of 2010,” the judge, Denise L. Cote of United States District Court in Manhattan, said in her ruling. She said a trial for damages would follow.

Part of the evidence was this video shot by Kara Swisher of Steve Jobs speaking with Walt Mossberg in the hands-on press area after the introduction of the original iPad in 2010. Mossberg asks Jobs why someone would buy a book for $14.99 from the iBookstore when they could buy the same book from Amazon for $9.99.

Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99, or they won’t be $9.99?

Jobs (smiling): The prices will be the same.

Judge Cote found that damning. No wonder Apple executives so seldom speak on the record.

(Pretty sure that’s me over Mossberg’s shoulder at the 1:45 mark.)

Methinks he detected some blowback and therefore made a stealth edit.

He added a sentence linking to the decision. Stealth edit, really?

You're shifting the emphasis of the original post around.

You are also the one who said that one sentence was declarative of his feelings on the case.

Could someone explain to me what might happen with the agency model? (I don't buy ebooks or follow any of that at all so I'm not sure if anything has changed since they all conspired to go with that) Since they already were caught and punished for their conspiracy in illegal price fixing, is it still price fixing if they just continue doing it even though they are no longer conspiring anymore? (in the direct sense anyways, they're not going to meetings as far as anyone knows) If it would still be considered illegal to go with the same model that was born from the initial conspiracy, how does the government enforce change?

A trial for damages will follow. All sorts of sanctions could be on the table. Presumably the negotiations will go very badly for any conspirator that doesn't give up the MFN/agency model.

No need to get defensive there, my little lamb. Unless you go out to coffee shops and strategically position your gear so that everyone can see you're using a macbook, listening to an ipod, or playing around with an ipad then you're not who I'm talking about, unless you wear shirts emblazoned with the Apple logos, that is.

I guess I'm convinced of the ruling's correctness. Even if Amazon were selling ebooks at a loss to keep out competition, that doesn't make Apple's collusion OK. Two wrongs don't make a right.

In every last thread on this case some it's been pointed out that Amazon's ebook division has made a profit from day , yet theres always a group of fucknuts who in either apparent lack of reading comprehension or to spread disinformation for their favoured fruity company have to repeat this retarded line...

That's not what the OP is talking about. If Monoprice was selling that item on Amazon, then Monoprice cannot sell that same item elsewhere cheaper than they are selling it for on Amazon's Seller Central.

Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations. When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry. We’ve done nothing wrong and we will appeal the judge’s decision.